This Morning: A-Day Arrives, More RIM Hope, Google Rising

By Tiernan Ray

Shares of Apple (AAPL) are up $1.20 at $505.97 as the company approaches its fiscal Q1 report after market close this afternoon. The Street is modeling $54.98 billion and $13.48 per share.

FBR Capital’s Scott Thompson this morning actually raised his estimate for the quarter, to $56.3 billion and $13.65 per share, while trimming the full year’s estimate. He writes that ”our checks throughout the quarter indicated exceptionally strong demand across all product segments and particularly for the iPhone 5 and iPad mini” but that he has to allow for ”the possibility of extended gross margin pressure from supply chain adjustments and a more competitive environment” the rest of the year. He cut his price target to $675 from $725.

Just in time for tonight’s report, some dire market share prognostications are out. DigiTimes’s Max Wang and Joseph Tsaithis morning write that the company’s iPad and iPad mini’s share of the tablet market ”continue to be eroded” by “an array of Android-based tablets by other branded vendors in the first half of 2013,” with combined market share dropping to around 50%. The authors don’t say from what level it dropped, but they are likely referring to a 60% or so statistic that has been generally cited.

And Bloomberg’s Edmond Lococo and Burce Einhornthis morning offer their curtain-raiser, which involves the story of China Wireless Technologies (2369HK), which is a domestic smartphone supplier whose “Coolpad 8060″ sells for just under $100 and is going to sell as many 28 million phones this year, more than Apple. The authors take that as a lesson on the problems of Apple’s high-priced iPhone.

The Street continues to respond to the impending introduction of Research in Motion‘s (RIMM) BB10 operating system software, scheduled for a week from today. RBC Capital’s Mark Sue this morning reiterates a Sector Perform rating and raises his price target from $11 to $19, citing carrier support and “an attractive subsidized price of $149.”

“While sentiment on RIMM is positive at the moment, things can quickly reverse if sell-though data is not favorable or if returns are high. We estimate downside at $12 (tangible book).”

RIM, by the way, today said its “BlackBerry Enterprise 10” software for managing different kinds of mobile devices, is available for corporate IT shops, as chronicled this morning by The Globe and Mail’s Iain Marlow.

Nearly everyone this morning is raising his or her price target on the stock.

Jefferies & Co.’s Brian Pitz, for example, raised his price target to $875 from $850, calling the results “solid.” The core search business is “firing on all cylinders,” he writes, with 18% year-over-year growth in owned search ad revenue. The main area of shortfall, in fact, was the $2.3 billion in Motorola revenue.

But Google will fix that with “a new smartphone to compete with the iPhone,” writes Pitz. Likewise, Michael Graham of Canaccord Genuity, raising his price target to $830 from $810, writes, “Motorola Mobility handset division appears to be in free-fall for now, pressuring consolidated revenue estimates.”

Shares of SAP AG (SAP) are up 61 cents, or 0.8%, at $78.13 after the company this morning reported revenue and profit per share in line with a pre-announcement last week. The company forecast €5.85 billion to €5.95 billion in operating profit this year, which is above the consensus for $5.56 billion. Nomura Equity Research’s Rick Sherlund, who has a Buy on the shares, and a €68 price target, writes that the forecast for “SSRS” revenue growth this year of 11% to 13%, probably implies Street estimates will have to come down a bit to allow for currency effects of 2 percentage points this year. SAP’s ordinary shares are up 2% at €58.94.

Shares of Check Point Software Technologies (CHKP) are down 40 cents, or 0.8%, at $47.57, after the company reported Q4 revenue of $368.6 million, missing the consensus $373.7 million, but beat on the bottom line, reporting 91 cents versus consensus 88 cents.

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JANUARY 23, 2013 10:23 A.M.

Mark Sue is a moron wrote:

He had a price target $11, stock went to $18 and THEN he raises his target. He is monkey, incapable of evolving to a human being. Tiernan why do you cite these neanderthals.

JANUARY 23, 2013 3:03 P.M.

Anonymous wrote:

Apart from Google and Samsung no one is making any real money off of Android. And as for the mobile sector. Apple continues making 70% of the profits in the mobile sector. And I expect Apple's earnings tonight to be even better than Google's.

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.